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university of southern california Operations And Supply Chain Management Assignment Help - A corporation


Question - A corporation with $7 million in annual taxable income is considering two alternatives:
Before-Tax Cash Flow
Year Alt. 1 Alt. 2
0-$10,000-$20,000
1-10 4,500 4,500
11-20 0 4,500
Both alternatives will be depreciated by straight-line depreciation assuming a l0-year depreciable life
and no salvage value. Neither alternative is to be replaced at the end of its useful life. If the
corporation has a minimum attractive rate of return of 10% after taxes, which alternative should it
choose? Solve the problem by:
(a) Present worth analysis
(b) Annual cash flow analysis
(c) Rate of return analysis
(d) Future worth analysis
(e) Benefit-cost ratio analysis
(f) Any other method you choose

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